Investing.com - Gold futures moved higher during U.S. afternoon trade Tuesday, erasing earlier losses as the safe-haven appeal of the precious metal re-emerged amid sustained concerns over Spain’s fiscal health and growing fears Italy will be the next euro zone country to require a bailout.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,612.05 a troy ounce during U.S. afternoon trade, gaining 1.01%.
It earlier fell by as much as 0.75% to trade at a session low of USD1,587.55 a troy ounce. Prices touched a one-month high of USD1,642.15 on June 6.
Gold futures were likely to find support at USD1,546.35 a troy ounce, the low from June 1 and resistance at USD1,642.15, the high from June 6.
Gold’s safe haven appeal re-emerged as the initial optimism which greeted news that Spain had secured a bailout for its banks faded and investors began to focus on the details of the rescue package.
The exact amount Madrid is to receive will only be decided later this month, after the results of independent banking audits are published.
In addition, questions remained over the source of the funds and whether the bailout repayments would add to the country’s already high borrowing costs.
Adding to Spain’s troubles, ratings agency Fitch cut the long-term credit ratings for Spanish banks Banco Santander and Banco Bilbao Vizcaya Argentaria to BBB-plus from A. The rating announcement followed the three-notch cut to the country's sovereign rating last week by Fitch last week.
Concerns about Spain’s banks have grown since Bankia, the country’s fourth-largest lender, said last month it needed EUR19 billion in state aid to shore itself up against bad loans.
Spain became the fourth European nation to seek a rescue, after Greece, Portugal and Ireland. Some investors fear it is only a matter of time before Italy becomes the next country to ask for help.
Spanish 10-year yields rose to 6.74%, the highest since late-November and up from 6.52% on Monday. Similar-maturity Italian yields increased to 6.20%, the highest since January.
Investors also remained jittery ahead of Sunday’s general election in Greece, which could decide the course of the country’s future in the euro zone.
Meanwhile, Cyprus said Monday it urgently needed European financial aid to shore up its banking system, a step that would make it the fifth euro zone economy to seek help.
The Wall Street Journal reported that the size of any bailout for Cyprus would amount to no more than EUR3 to EUR4 billion.
Elsewhere on the Comex, silver for July delivery rose 0.93% to trade at USD28.88 a troy ounce, while copper for July delivery slipped 0.19% to trade at USD3.34 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,612.05 a troy ounce during U.S. afternoon trade, gaining 1.01%.
It earlier fell by as much as 0.75% to trade at a session low of USD1,587.55 a troy ounce. Prices touched a one-month high of USD1,642.15 on June 6.
Gold futures were likely to find support at USD1,546.35 a troy ounce, the low from June 1 and resistance at USD1,642.15, the high from June 6.
Gold’s safe haven appeal re-emerged as the initial optimism which greeted news that Spain had secured a bailout for its banks faded and investors began to focus on the details of the rescue package.
The exact amount Madrid is to receive will only be decided later this month, after the results of independent banking audits are published.
In addition, questions remained over the source of the funds and whether the bailout repayments would add to the country’s already high borrowing costs.
Adding to Spain’s troubles, ratings agency Fitch cut the long-term credit ratings for Spanish banks Banco Santander and Banco Bilbao Vizcaya Argentaria to BBB-plus from A. The rating announcement followed the three-notch cut to the country's sovereign rating last week by Fitch last week.
Concerns about Spain’s banks have grown since Bankia, the country’s fourth-largest lender, said last month it needed EUR19 billion in state aid to shore itself up against bad loans.
Spain became the fourth European nation to seek a rescue, after Greece, Portugal and Ireland. Some investors fear it is only a matter of time before Italy becomes the next country to ask for help.
Spanish 10-year yields rose to 6.74%, the highest since late-November and up from 6.52% on Monday. Similar-maturity Italian yields increased to 6.20%, the highest since January.
Investors also remained jittery ahead of Sunday’s general election in Greece, which could decide the course of the country’s future in the euro zone.
Meanwhile, Cyprus said Monday it urgently needed European financial aid to shore up its banking system, a step that would make it the fifth euro zone economy to seek help.
The Wall Street Journal reported that the size of any bailout for Cyprus would amount to no more than EUR3 to EUR4 billion.
Elsewhere on the Comex, silver for July delivery rose 0.93% to trade at USD28.88 a troy ounce, while copper for July delivery slipped 0.19% to trade at USD3.34 a pound.